Gen Z is set to account for nearly two-thirds of second-hand purchases over the next five years, according to an April 2023 report from resale company ThredUp. American Eagle is trying to facilitate accessible shopping again for this customer by selling second-hand products through the Snap AR store. Previous AR stores have driven $10 million in total revenue for the brand, and now it’s even leaning on the technology to drive sales.
Selling second-hand goods in a way that appeals to Gen Z is difficult for brands, due to clunky website integrations, difficulty in finding desired items, or lack of suitable means. to promote individual products on a brand’s social platforms and website, according to brand executives in earlier interviews. Re-offering through owned and third-party channels has become of great interest to brands in recent years. The North Face, meanwhile, has launched its Renewed second-hand assortment 2022.
On April 14, the American launched RE/AE, an online resale shop with a corresponding Snap AR pop-up shop with 200 items. On the retailer’s app and website, shoppers can now shop pre-loved clothes from a curated assortment of styles from the ’80s, ’90s and ’00s. Through the Snap Lens filter on the brand’s Snap account, customers can browse a virtual store and try on items through AR.
“This is the first time we’ve put pre-loved clothing in our top navigation, which is prime ground for any e-commerce site,” said Craig Brommers, CMO at American Eagle. “It gives it more exposure than before.”
Brommers said the brand is focused on offering a seamless experience from the Snapchat lens pop-up store to the site’s resale vertical. “If something catches my eye [as a shopper], the selling point for me is that I can buy it right into that experience,” he said. “I don’t have to go anywhere else, or send to ThredUp or the AE site at [buy] this.”
With Gen Z using TikTok and Snapchat as their two primary applications – TikTok for entertainment and Snap for communication, according to AE focus groups – Snapchat is a growing focus for the brand. With 750 million monthly active users, Snap has become the go-to for brand-driven AR activations, especially for brands targeting Gen Z. Brands including New Balance, Pangaia and Gucci launched AR activations on Snap. Currently, the RE/AE Snap AR pop-up store is getting 5% more swipe-ups on the platform compared to the brand’s benchmark rate. American Eagle declined to share the benchmark rate.
Anthony DiMuccio, Snap’s US head of retail and e-commerce, said Snap is working with American Eagle’s marketing team to reinvent the retailer’s in-store shopping experience. “The AR pop-up store allows them to seamlessly choose and learn more about the styles they want. Globally, 92% of Gen Z are interested in using AR for shopping, and know We think continuity is very important to them,” he said, citing the Snapchat Generation 2022 report.
According to data from Snap, two out of three Snap users engage with AR every day, and over 70% of users who download the app engage with AR on their first day with the app. In previous conversations, Snap’s head of luxury, Geoffrey Perez, said that high resolution and a seamless experience are the keys to successful AR activation, as brands see it. American Eagle operates eight augmented reality stores on Snapchat so far.
For American Eagle, AR stores work to build brand image and drive sales. The brand has recorded more than $10 million in revenue from the AR stores it runs on Snap since 2020. “As a retailer, we’re no longer in the retail industry, we’re in the entertainment industry,” it said. Brommer. “And experiences that are unique, different and eye-catching dominate and drive sales.”
But reaching Gen Z on Snapchat is a challenge. “What we’ve learned so far is to focus on a tight collection with about 20 SKUs, and keep the store open for a limited time, maybe two to three weeks,” said Brummers, who also reiterated the importance of a seamless experience. It’s said with a lot of love, but Gen Z has the attention span of a gnat, and if there’s any friction in that experience, they’ll bounce and they’ll move on to something new.
Reported by American Eagle Outfitters, Inc. net income of $1.5 billion, minus 1% in the fourth quarter of 2022, which exceeded analyst expectations.